April 22, 2018

4 Common Financial Mistakes Single Parents Must Avoid

2018-04-22T17:11:00+05:30

Being a single parent is tough when it comes to managing finance and bills barely making from one paycheck to another paycheck. The debts from mortgages and loans will keep on building up until you decide to avoid common financial mistakes that single parents make. This post will help single mom, single dad, single parent to look at debt, mortgages, loans at more practical and refreshing ways. There are many financial mistakes people make without thinking twice and that will lead to gross debt.

I have written a post on 7 Effective Steps to Get Out of Mortgages and Loans for Job seekers who are unemployed. That would be a good read to start with to identify ways to get out of mortgages and loans. We need to identify the mistakes first, correct them, take new initiatives and learn financial discipline to get out mortgages and loans as a single parent.

Who is a Single Parent?

As per Wikipedia, A single parent is a parent that parents alone without the other parent's support, meaning this particular parent is the only parent to the child, responsible for all financial, material, and emotional needs.

Who is a Single Mom?

A mother who has a dependent child or dependent children and who is widowed, divorced, or unmarried. Source: Collins

SINGLE PARENT FACT

There are approximately 13-17 million single parents in the United States and they are responsible for raising around 18.1 million children which represents 26 of all children in the United States under the age of 21 years old. Source: Magazine


Common Financial Mistakes Single Parents Must Avoid

Common Financial Mistakes that Single Parents Make

There are many common financial mistakes committed by single parents or their ex- spouses. It is time to identify them and see how one can correct them in future course to get out of debt from mortgages and loans.

1. Searching for Full Time Job Only

Is it necessary to always search for full time jobs. Many single parents commit the mistake of searching for full time job when then can earn from part time or online jobs. I know many single parents who make double money doing part time work than their previous full time job. There are many websites and online magazines that will help you to work from home including WAHM.com.

Have you ever considered to go for part time work or earning from online works. Learn how you can use your skills to earn money.  You can approach local employment center or even your friends if they are looking for a person. Read more on Passive Income Ideas for Making Money While Sleeping.

Financial Mistakes Single Parents

2. Earning Slow, Spending Fast

Many single parents complain that the bills get accumulated every month, personal expenditure gong high, business is failing, took poor decisions of buying car, taking a home loan, children's tution was not paid and lot more. This basically involves Financial Discipline

You may need to sit one day, take out a notebook and pen, write down all your expenses, investments, earnings and find out the gaps. I would also suggest to talk to credit counselors who offer financial advice for free online. You can also talk to financially savvy friends to get some understanding of financial course.

3. No idea of Rates of Mortgages and Loans

Many single parents have never thought about understanding how mortgages and loans work and how interest rates are calculated. They just keep on paying bills and fixed EMIs and at the end of 3-5 years, understand that they capital has not even gone down a single bit. Only when you put effort to understand the financial system, then you can manage EMIs and see how debts are dwindling down.

Find out which debt from mortgage and loan has higher interest rate and pay off that first. Talk to a fee only financial planner to create a road map for future financial course and how to effectively manage economical decisions.

4. Small Financial Actions are better than Large Financial Decisions

I have seen single parents taking large decisions like I am going to pay off the entire debts from mortgages and loans in 6 months, or I am going to save this much money fro my children. This does not work usually. Why? The financial stress from mortgages and loans are comparatively high and person tend to forget or repress these decisions.

Common Financial Mistake

Let us look at small financial actions to get more money in hand. 
  • Do you have a line of credit @5.25%, why don't you search for a Homeline credit line @ 3.5%. 
  • Paid subscription to bunch of magazines and newspapers, Unsubscribe and get free copies from friends or online forums. 
  • Pack a lunch and save instant money.
  • Join local buyers club and save on groceries.
  • Take a list of items that buy at home in a month, categorize them as per cost and avoid high cost items and replace them with low cost item.
  • Start Tracking expenditure with free mobile apps, take a print out every month and check ways how to reduce spending next month.
  • Sell out old stuff and save space in your home. 
  • Look for cheaper deals using apps, newspapers and compare at least 3 places.
  • Buy items and resell them in ebay, amazon, other sell-buy apps. Read more on Top 36 Android Apps For Buying and Selling Used Items.
Have self determination and disciple and you can pay off the debt. Learn from the mistakes and try to do recourse. Many around us are also having debts and trying their level best to pay off them. It need courage and the right path. You must avoid common financial mistakes and do what is best even if you do not like it. Share for other single parents, friends in your circle and have a discussion with them on this.

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